Rotted Wall/Studs..Maybe Insect or Dryrot??

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Lpowers27

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Hi everyone - this is my first post...I'm looking for some advice.

My husband and I are getting new carpet, and decided to replace the gross pressboard subfloor in in our 1975 home with plywood. In the process, we found a few small spots of a mold like substance on the sheetrock behind the baseboard. When cutting open the sheetrock next to our brick fireplace, we found a substantial amount of rot in the three visible 2x4s, the wall sheathing on the exterior part of the wall, and the sole plate. Picture is attached. We went to the basement, the sill looks to be ok.

There is some white residue, and poking around just now...I found what was like a soft web full of sawdust with a few insect parts. I have a chicken and the egg conundrum. Was the wood wet, and attracted insects...or are the insects what caused the problem to begin with? Either way, it doesn't look to be an active infestation. Also looks like maybe we had powder post at some point?

My best guess is that we had rain runoff from the exterior chimney enter the house somehow. Is this something we can just cut out the rotted/dead wood and replace?

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Also, I just poke around in the beam farthest to the right...it is total sawdust inside. The exterior looks not so bad, but poking straight up leads to a cascade of destroyed wood.
 
Brick will absorb water and transport it to a warm area. Once in there you could get mold rot or insects. Wood should never be places against concrete or brick without some sort of moister break.
So once you have this fixed you also want to look for a brick sealer for the outside of the brick, one that wiull breath but stop water.
The two studs next to the brick are likely supporting a header in the ceiling or above the fireplace that needs to be made strong again.
So you need to remove as much crap as you can, get down to solid wood or solid something below. You can just cut the bottom of those studs off and put short peices in to replace the bad stuff. Protect new wood with poly, tar paper, or whatever that will stop moister from the brick.
When you have all the junk out and before replacing with new paint everything with a copper product, you can buy a quart at the lumber yard, it's green like treated lumber product, that will kill anything that is left in there and paint all the new lumber with the same stuff.
And welcome to the site.
 
Those board definitely look like rot to me, but cod very well be bugs. The white is mold, but you can kill and remove the mold. As for the rot, make sure you seal around the perimeter of your house to create a sealed base against more water, because I'm sure all of that is due to water damage. I just did a job where there was water damage getting in behind some exterior soffit and it looked just like that. Our fix was replacing a bad gutter, but making sure more water can't get in is imperative in price ting further damage.
 
If the inside of the wood is eaten but the outside looks ok, that could be termites. They don't like light so they rarely break the surface. It may be old damage, but you should cut back till you find solid wood.
 
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